France July Services PMI 49.8: 7-Month High, Fragile Recovery

France's services sector contraction eased in July, with the HCOB Services PMI rising to 49.8 from 47.5. That beat the 47.5 consensus and marked the highest reading in seven months, the survey showed.

Demand for services rose for the first time since November, supporting the headline number. Still, the index remained below 50, indicating contraction. Employment declined for a second month, and business sentiment stayed low.

Input cost and output price inflation slowed for a second consecutive month, according to the survey. The report's authors warned that the improvement may not last.

The euro's reaction to the data and the broader risk backdrop will be key for EUR/USD traders.